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Tariffs 'harmful' to US, MEMA testifies to USTR

MEMA, the Motor & Equipment Manufacturers Association, recently testified on behalf of its division members on the Section 301 proposed China tariffs as part of a three-day public hearing before the United States Trade Representative (USTR) in Washington DC.

USTR proposed a 25-percent tariff on a wide variety of products imported from China, including certain motor parts and equipment as part of the Section 301 action to remedy intellectual property theft.

“Vehicle suppliers operate in a global supply chain of domestic and international suppliers and customers,” Ann Wilson, MEMA’s senior vice president of government affairs, said during testimony.

Ann Wilson, MEMA VP of government affairs

“China is a large and important trading partner for our industry. Many US motor vehicle suppliers have manufacturing facilities in China to service Asia and the rest of the world. Domestic capacity is simply not available for some of the materials and parts from China relied on by suppliers. These parts are necessary to enable domestic vehicle suppliers to continue their US-based operations.

“The proposed tariffs on the listed products relied on by suppliers will cause disproportionate harm to US interests by disrupting American manufacturing operations and increasing costs, both to US producers and consumers. The increased costs will place a significant harmful burden – particularly on small and medium businesses – including the possibility of forced bankruptcy and loss of income.”

Wilson said the tariffs, ultimately, will impact US consumers.

“The price will be loss of current jobs, constrained access to materials and parts, and curtailed future US investments by vehicle suppliers.” Wilson said. “We urge you to not move forward with broad-based tariffs as outlined in MEMA’s written submission to USTR. Additionally, MEMA recommends bilateral discussions between the US and China before implementing any tariffs that will harm our industry, job creation, domestic investments and the overall US economy.”

In addition to oral testimony, MEMA submitted to USTR written comments on the issue in response to the Notice of Proposed Determination and Request for Comments issued last month regarding actions related to trade practices of China. The comments ask USTR to remove certain motor vehicle materials and parts imported from China from the proposed list of tariffs. MEMA included an aggregated, non-exhaustive list of products included in the USTR’s proposal that should be excluded.

The primary reasons are these products are used in the motor vehicle supplier industry, either as part of the manufacturing production line or as materials needed to manufacture components.